MetLife lowers outlook of Alico buy

MetLife, the biggest U.S. life insurance company, said it now sees operating earnings per share for the year rising 40 cents to 45 cents. The company had previously said it expected to realize a 45 to 55 cent-per-share boost to its 2011 profit.

Analysts expect MetLife to report $5.35 per share for 2011.

It also said it would sell 75 million shares and offer about $3 billion in senior debt to help pay for Americal Life Insurance Co (Alico). At Friday's closing price of $42.06, MetLife would get $3.15 billion for the shares.

Combined with cash on hand, MetLife said the share and debt sales would fund the $6.8 billion cash portion of the purchase price for Alico, which it agreed to buy from American International Group Inc in March for $15.5 billion in cash and stock.

Last week, MetLife posted second-quarter operating earnings, excluding investment gains and losses, of $1.02 billion, or $1.23 a share, beating analysts' average forecast of $1.00 a share, according to Reuters Estimates.

MetLife also said the Alico purchase will enable it to boost its 2011 year-end operating return on equity by about 100 basis points.

It said operating earnings per share does not include transition and other one-time expenses estimated at 12 cents per share, and said the revision reflects an assumed issuance of 75 million shares of common stock in a public offering at the July 30, 2010, closing price of $42.06 per share.

MetLife first started eyeing Alico, which sells life, accident and health insurance as well as retirement and wealth management products in 55 countries, in the months before AIG nearly collapsed in September 2008.

MetLife will get a special boost in Japan, the world's second-largest life insurance market, which accounts for as much as 70 percent of Alico's pretax operating income.

With operations in 17 countries, MetLife currently earns only 15 percent of its profit from abroad, according to a report in the Wall Street Journal on Saturday.

Alico will boost that figure to 40 percent, the paper said.

(Reporting by Christopher Kaufman, editing by Maureen Bavdek)